Iyinoluwa Aboyeji's Advice For Startup Founders In 2025!—There's No Free Money Again!

The simple yet insightful pieces of advice for African startup founders in 2025 from the cofounder of Flutterwave and Andela—Iyinoluwa Aboyeji—the era of free money is over!

The startup ecosystem in Africa is rapidly evolving, especially for the healthtech sector.

The current season of funding cuts is a clear signal for startup founders to adapt quickly to the changing funding landscape, as investors are becoming more cautious about their investments. Those who fail to adapt, evolve or adjust will be caught in the storm.

Recently, I came across Iyinoluwa Aboyeji's post on LinkedIn, where he shared practical and insightful advice for startup founders in Africa.

His words resonate with the current funding realities and empower founders with actionable strategies.

The Era Of Free Money Is Over!

"If you are still carrying around a deck asking for $1m yet you haven't launched - you are absolutely wasting your time. No one is funding those anymore. I still see these decks and I am screaming - wake up! It is not 2022 anymore."

The era of free money in the startup ecosystem has officially ended, not only in Africa but globally.

Nobody will give you money because your pitch deck or presentation was colourful, full of figures and presented with fire and excellent oratory skills.

Investors are now looking for scale, growth, and real impact, not fancy decks and unreasonable ideas!

The post-COVID era can be held accountable for the startup frenzy we witnessed.

The sudden surge in tele-health startups, which seemed like a gold mine, was a direct result of the pandemic's impact on the healthcare sector.

All of a sudden, telehealth and telemedicine startups became the new deal, and everybody was busy building one telehealth app after another.

There was money to fund all these startups. Governments had made money available. But immediately the pandemic came to an end, most of these startups saw the same fate, and 2 to 3 years later, most of them are no longer operating or are planning on closing down operations.

The world is now resetting? And the startup ecosystem is smoothening and evening out as the money in circulation now is no longer available as it used to be, and investors don't want to put their money in ventures that would shut down after a year or two.

Iyinoluwa's advice is rich and instructive for founders and innovators. Especially those in Africa.

Iyinoluwa is one of Africa's most celebrated tech entrepreneurs (Andela & Flutterwave). And he has been in the game before the 2020s, when startup culture started expanding and every young person wanted to be a founder or co-founder.

Here are the pieces of advice he shared.

Launch First

He advises founders to launch first. Ideas are exciting, but the era of backing or funding ideas on paper has ended. Now, investors want to at least see that you've launched and are actively building something.

Sell Before You Build

Have a customer or customers who are willing to give you money for what you're building before you start building. How can you do this?

Iyin advise that you discuss with potential customers and tell them about what you are planning to build, and see if they are ready and willing to pay for what you're building. Understand what you're building beyond the surface and know what the customer wants.

Start With The Angels You Know

When it comes to raising some money, Iyin advises that you start with your innermost circle of family and friends. Pitch your ideas to them first and measure the degree of their belief in that idea. If they understand and believe your idea well enough to drop "something", then it's likely that bigger angels might be able to buy into your idea too. And if they don't understand or believe in your idea, then it would be difficult for those far away who don't know you to back you up with money.

"Start with the angels you know. Your former boss. Your co-workers. Your uncle. Your college roommate. Your own piggy bank. If they (or you) don't believe in you or your ideas enough to drop 1k or 2k checks - neither will most smart angels. These people are the best judges of your character and if they won't back you - most people won't. Once they've backed you their intros mean a lot more to folks like me."

You Might Need An Accelerator

Accelerators are organisations that provide mentorship, resources, and sometimes funding to early-stage startups in exchange for equity. They can be a valuable stepping stone for startups, helping them validate their business model, build a network, and prepare for further fundraising.

Accelerators are a great way to validate your business and build an audience for fundraising. Iyin suggests founders search for the right accelerators and build under them. Building under an accelerator helps with fundraising from other angels you don't know.

"The truth is the right accelerators are great ways to validate your business and build an audience for fundraising from angels you don't know. Don't look down on it."

Build A Profitable Business As Fast As You Can

Cutting costs and increasing revenue are the two ways to build a profitable business, according to Iyinoluwa.

"In the early days of Andela, we mooched off people for offices until we could afford our own. At Flutterwave, I had no salary for the first year until our infrastructure costs were covered. It's not comfortable, but it's worth it."

Founders need to learn how to pursue profitability. Do what needs to be done. Even if it means forgoing fancy office spaces or going without salary for a while, as Iyin did in order to have enough resources to cover vital infrastructure needs.

In the early days of building your business, comfort is not the goal. The primary focus is on how to make the business profitable!

Africa's Changing Startup Funding Ecosystem

The startup ecosystem in Africa has changed dramatically. Building is now even more difficult as funding has seen a steep decline on the continent.

In the first half of 2024, African tech startups raised $780 million, which is the lowest total since late 2020 and a substantial 57% decline compared to the same period in 2023.

This reduction in funding has led to the closure of some notable startups.

What's the cause of the reduced funding?

Several factors contribute to this, with rising global interest rates increasing the cost of capital, as a result, investors are becoming more risk-averse, particularly towards early-stage startups in emerging markets like Africa.

African startups already struggle with "home" challenges like unreliable infrastructure, regulatory gaps, and other existing challenges that have made building difficult; now, combined with a global shift in the flow of funds, it takes startups that are ready to go the long journey to survive in Africa—serious leaders, founders and teams!

Apart from global funding dynamics and infrastructure challenges, there's also the challenge of poor leadership, which has caused several startups on the continent to fail.

Already, four startups on the continent have shut down operations this year—Joovlin, Edukoya, Bento Africa, and Lipa Later are the most recent startups to cave under unbearable pressure and the harsh conditions of Africa's startup ecosystem.

Reasons for their failure:

• Lack of adequate funding to scale operations.

• Market readiness challenges.

• Local infrastructure hurdles.

• Financial misappropriation.

• Leadership turmoil.

Surviving in Africa's startup ecosystem is not going to get easy.

As long as traditional challenges remain and external pressures keep mounting, founders and leaders need to keep learning how to adapt, adjust and evolve to survive in Africa's startup ecosystem.

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